U.S. stocks had their biggest slide in five weeks after President Joe Biden was said to propose almost doubling the capital-gain tax for the wealthy. The dollar advanced.
The S&P 500 turned lower after Bloomberg News reported that for those earning $1 million or more, the new top rate, coupled with an existing surtax on investment income, means that federal tax rates for rich investors could be as high as 43.4%. Speculation arose that some traders may sell shares before any change is made to capture the lower rate.
“Sticker shock over some of these tax figures will be hard to shake off for some investors,” Edward Moya, senior market analyst at Oanda, wrote in a note. “Some traders are looking for an excuse to lock in profits and they might choose to use this tax story as their catalyst.”
Equities whipsawed throughout the session a S&P 500 drops on Biden plan to boost capital-gain tax
Elsewhere, Bitcoin declined for the sixth time in seven days, extending losses after the higher capital gains proposal was revealed. Investors already face a capital-gains tax if they hold the cryptocurrency for more than a year.
